The government of China has a bitter relationship with the cryptocurrency market, in the meantime China has supported the use of blockchain technology, but the country banned Initial coin offering (ICO) in September 2017. On 21 March, 2019, the Beijing Internet Finance Industry Association (BJIFIA) has announced the alert against any kind of investment in STOs, ICOs, Stable coins and other virtual currency fundraising substitute.
China has been very progressive about adapting the blockchain technology, but they are very strict for cryptocurrency trading and investing and they also banned the crypto supportive accounts on the social media messaging app WeChat. The local authorities have also prohibited some hotels from organizing any occasions related to cryptocurrencies.
The Beijing Internet Finance Industry Association stated that the digital currency startups are utilizing terms such as “Financial innovation” as they scheme to attract traders and investors. The Association has issued a statement, “The value of trading speculation has been lucrative. Using the names of “research” and “forum” to promote “ICO” and “IEO”, “STO”, “stable currency”, “integral currency”, “digital currency”, etc., in order to carry out training, project promotion, financing transactions and other forms of online and offline activities. Such activities are not really based on blockchain technology, but take the opportunity to speculate on the concept of blockchain, which seriously disrupts the normal financial and economic order and brings social risks.”
The government of China wants to build financial firmness, and will control activity like request money from common people for investment, as per Jack Lee, the managing director at HCM Capital. Also the Chinese President Xi Jinping said the blockchain a “breakthrough” technology.
The association BJIFIA, earlier know by the name of Beijing Internet Credit Industry Association, prompted that on 4 September, 2017, the People’s Bank of China released the “Accouncement on Preventing the Risk of Subsidy Issuance Financing”, stated that, “The financing of the issuance of the token refers to the illegal sale and circulation of the financing entity through the token, and the investment in digital currency, such as Bitcoin and Ethereum, is essentially an unauthorized illegal public financing, suspected of illegally selling tokens, illegally issuing securities, and illegal fundraising, financial fraud, pyramid schemes.”